Hotel plans shelved, old Silk Mill is up for sale again

April 6, 2012, 1:35PM

04/06/2012

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Like some giant haunted mausoleum to the faded era it belongs, the old Silk Mill building on Lakeville Street looms above the working class homes and older wood structures surrounding it. Sad and powerful, the 1892 building, with its facade of red brick, broken windows and ivy, stands on a property of over-grown weeds, bent and broken chain-link fencing and rusted fire escapes.

And like an old home that cannot find a new owner, the building is once again for sale, once more seeking new life for a historic structure that reminds Petaluma of its proud industrial past.

"It's a beautiful building and can be used," said City Councilman Mike Healy. "It's one of two buildings on the Historic National Register in this area and it was only a few years ago that the Petaluma Educational Foundation held a fundraiser there."

The building, which was home to Petaluma's Sunset Line and Twine Company from the early 1930s until 2006, was approved for redevelopment as a hotel in 2009 and there was tremendous enthusiasm for a project that was expected to earn the city more than $300,000 per year, mostly from transient occupancy tax revenues. But when the national economy soured, the property's owner, San Mateo hotel developer B.B. Patel, changed his mind about building a hotel on the site.

"The economic environment of the area and the market makes it non-conducive for the current owners to build a hotel at that location," said Whitney Strotz of Cassidy Turley Realty. Strotz is the marketing spokesperson for the sale of the building from Patel's company. While as many as five hundred potential investors have been contacted, Strotz said there were no immediate buyers.

Patel purchased the property for an undisclosed price from the Petaluma Preservation Group, whose investors planned to build condominiums in the two-story building.

After the city ruled in 2007 that the condo project could not be approved before the adoption of the 2025 General Plan, the group declared the project dead and put the building on the market.

Patel, who operates eight Best Western hotels in California, was one of the condo project's original investors.

"We are still in the early stages of marketing the building," said Strotz. "It can be used for any number of venues, including hospitality, retail and office space, as well as residential living. But we have no buyers at this time."

Possibilities for the building include everything from another hotel to a residential proposal like the one presented to the Petaluma City Council in 2006. Strotz said a brewery, winery and cheese factory have been discussed.

But as Councilman Healy noted, any development of the property would be difficult from the standpoint of getting something approved that could fit with the neighborhood. "There would probably need to be a rezone of the property if it were not built as a hotel or residential facility," said Healy.

"And if the usage profile were to increase traffic or impact the surrounding residential area, then an environmental impact report or general plan amendment might be necessary," he said, "which would add cost and time to any project."

Like some giant haunted mausoleum to the faded era it belongs, the old Silk Mill building on Lakeville Street looms above the working class homes and older wood structures surrounding it. Sad and powerful, the 1892 building, with its facade of red brick, broken windows and ivy, stands on a property of over-grown weeds, bent and broken chain-link fencing and rusted fire escapes.

And like an old home that cannot find a new owner, the building is once again for sale, once more seeking new life for a historic structure that reminds Petaluma of its proud industrial past.

"It's a beautiful building and can be used," said City Councilman Mike Healy. "It's one of two buildings on the Historic National Register in this area and it was only a few years ago that the Petaluma Educational Foundation held a fundraiser there."

The building, which was home to Petaluma's Sunset Line and Twine Company from the early 1930s until 2006, was approved for redevelopment as a hotel in 2009 and there was tremendous enthusiasm for a project that was expected to earn the city more than $300,000 per year, mostly from transient occupancy tax revenues. But when the national economy soured, the property's owner, San Mateo hotel developer B.B. Patel, changed his mind about building a hotel on the site.

"The economic environment of the area and the market makes it non-conducive for the current owners to build a hotel at that location," said Whitney Strotz of Cassidy Turley Realty. Strotz is the marketing spokesperson for the sale of the building from Patel's company. While as many as five hundred potential investors have been contacted, Strotz said there were no immediate buyers.

Patel purchased the property for an undisclosed price from the Petaluma Preservation Group, whose investors planned to build condominiums in the two-story building.

After the city ruled in 2007 that the condo project could not be approved before the adoption of the 2025 General Plan, the group declared the project dead and put the building on the market.

Patel, who operates eight Best Western hotels in California, was one of the condo project's original investors.

"We are still in the early stages of marketing the building," said Strotz. "It can be used for any number of venues, including hospitality, retail and office space, as well as residential living. But we have no buyers at this time."

Possibilities for the building include everything from another hotel to a residential proposal like the one presented to the Petaluma City Council in 2006. Strotz said a brewery, winery and cheese factory have been discussed.

But as Councilman Healy noted, any development of the property would be difficult from the standpoint of getting something approved that could fit with the neighborhood. "There would probably need to be a rezone of the property if it were not built as a hotel or residential facility," said Healy.

"And if the usage profile were to increase traffic or impact the surrounding residential area, then an environmental impact report or general plan amendment might be necessary," he said, "which would add cost and time to any project."